PM David Cameron set up the inquiry after it emerged that the News of the World had hacked the phone of Milly Dowler, a murdered schoolgirl, as well as targeting dozens of crime victims, celebrities and politicians.

British police have launched three linked investigations into misdeeds by newspapers, while Mr Cameron's former spokesman Andy Coulson and ex-Murdoch aide Rebekah Brooks have both been charged with phone hacking and bribery.

Overnight Mr Cameron warned that Britain's current newspaper regulation system was unacceptable.

"The status quo, I would argue, does not just need updating - the status quo is unacceptable and needs to change," Mr Cameron told parliament.

"This government set up Leveson because of unacceptable practices in parts of the media and a failed regulatory system."